(Bloomberg) — London Stock Exchange Group Plc is delaying the start of its midday market auction until February, citing its customers need for more time to run tests.
This will allow further opportunity for customer development and testing at a time when market participants are already having to make numerous technology implementations and updates ahead of major new regulation, Lucie Holloway, a spokeswoman for LSE, said in an e-mail.
The two-minute pause to continuous trading in the middle of the day, during which the size of orders will be hidden, is meant to attract bigger, block trades. LSE had planned to introduce the auction later this year.
The ability to trade large blocks of shares has emerged as a critical topic in Europe, partly because rules limiting dark- pool trading will take effect in 2017. Big investors such as Norges Bank Investment Management have shown keen interest in initiatives designed for block trades.
Like most primary exchanges, LSE already holds auctions at the beginning and end of each trading day, and Deutsche Boerse AG has held one at 1 p.m. Frankfurt time since 1998.
National exchanges lost market share to upstart venues including Bats Chi-X Europe after rules introduced in 2007 gave brokers more choice over where to send their business. Traditional exchanges retain their dominance during auctions, however, with trading returning to them while opening and closing prices are calculated.
